Article 14 and tax administration powers: general transfer and supervisory provisions were upheld absent purposeful discrimination.

Sub-sections (7A) and (7B) of section 5 of the Income-tax Act, 1922, were considered under Article 14 for permitting transfer of assessments and supervisory directions by higher income-tax authorities. The Court held that the provisions were general in operation, did not change the ordinary assessment procedure, and did not remove the assessee's appellate, revisional, or other legal safeguards. Mere transfer of a case to a special circle was insufficient to prove hostile discrimination; intentional or purposeful discrimination had to be shown, and good faith was presumed. The constitutional challenge therefore failed.

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Issues: Whether sub-sections (7A) and (7B) of section 5 of the Income-tax Act, 1922, violated Article 14 of the Constitution of India by authorising transfer of cases and supervisory directions that allegedly resulted in discriminatory treatment of assessees.

Analysis: The challenged provisions empowered transfer of cases from one Income-tax Officer to another and enabled superior income-tax authorities to issue guidance for assessments and to exercise inquiry powers. The Court distinguished cases where a special procedure, harsher consequences, or denial of ordinary remedies created unconstitutional discrimination. It held that these provisions operated generally, did not alter the normal assessment procedure, did not deprive the assessee of appeal, second appeal, revision, or other legal safeguards, and did not on their face create a hostile classification. The mere fact that a particular case was transferred to a special circle did not by itself establish denial of equal protection. To succeed under Article 14, intentional or purposeful discrimination had to be shown, and the good faith of officials acting under the statute was presumed.

Conclusion: The provisions were held not to be violative of Article 14, and the challenge to their constitutionality failed.

Final Conclusion: The petition challenging the transfer and supervisory powers under the Income-tax Act was rejected, and the rule was discharged.

Ratio Decidendi: A facially general tax provision does not offend Article 14 unless it creates a materially different procedure, remedies, or punitive consequences, or is shown to be administered with intentional and purposeful discrimination.

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